Three Reasons an Old 401(k) May Benefit From Professional Wealth Management
Reason #1:Target-Date Funds Are “One Size Fits Most”, “Not One-Size-Fits-You”.
Your Retirement Strategy Should Be Personal
Supporting Evidence
Target-date funds automatically adjust risk as retirement approaches, but they generally do not consider1:
- Individual tax situations
- Pension income
- Social Security timing
- Other assets
- Estate planning goals
- Healthcare expenses
- Required Minimum Distributions (RMDs)
- Qualified Charitable Deduction Strategies
A target-date fund manages investments, but it doesn't take into account the events in your life.
Retirement success depends on coordinating investments with taxes, Social Security, income planning, healthcare costs, and legacy goals.
Reason #2: Professional Advice Has Been Shown to Improve Investor Outcomes2
Research estimates that a skilled advisor may add approximately 4.92%in net annual value through:
- Behavioral coaching
- Tax-efficient withdrawals
- Asset location
- Rebalancing
- Spending strategies
Research consistently shows that the greatest value of an advisor often comes not from stock picking, but from behavioral coaching, tax planning, withdrawal planning, and helping clients avoid costly mistakes.
Reason #3: Wise Plans Require Wise Counsel
"Plans fail for lack of counsel, but with many advisers they succeed."
Proverbs 15:22
Retirement is one of the most significant financial transitions you'll ever face. Yet many old 401(k)s remain disconnected from a broader retirement strategy, operating without the benefit of coordinated planning.
While an investment account can help accumulate assets, a retirement plan often requires additional guidance and perspective. Decisions involving retirement income, taxes, Social Security, healthcare costs, estate planning, and legacy goals frequently intersect in ways that may not be obvious when viewed independently.
The wisdom found in Proverbs 15:22 reminds us that important plans often benefit from thoughtful counsel.
In this video: “The Why of Wealth Management” Edwin McKnight communicates McKnight’s vision of what Wealth Management should provide.
Summary:
The question is not simply, "How is my old 401(k) invested?" The better question may be: "Is my retirement plan benefiting from the counsel and coordination needed to help me pursue my goals?"
Research from Morningstar and Russell Investments highlights that retirement outcomes are influenced not only by investment performance, but also by planning decisions such as withdrawal strategies, tax efficiency, behavioral discipline, and coordinated financial planning.
“We believe Americans are increasingly wanting holistic advice rather than a Target Date or Index Fund supported by a website and a 1800 #.
McKnight seeks to help our clients obtain their greatest opportunity for success! ™” Edwin McKnight
Want to learn more about McKnight’s Wealth Management process? Join us for an educational dinner on July 30th at The Boulevard.
Click here to reserve your seat (which is limited!!!): RSVP to McKnight’s Retire with Power Event.
Sources
1Investopedia: https://www.investopedia.com/terms/t/target-date_fund.asp
1Kiplinger: https://www.kiplinger.com/article/investing/t047-c032-s014-is-a-target-date-fund-right-for-you.html
2 Morningstar: https://www.morningstar.com/financial-advisors/gamma-action
2 Russell Investments: https://russellinvestments.com/content/dam/ri/files/us/en/financial-professional/insights/value-of-an-advisor-study.pdf